Tech Targets: EUR/USD, GBP/USD, USD/JPY, AUD/USD, NZD/USD - UOB
EUR/USD: Bullish (since 15 Jan 18, 1.2195): The next ‘target’ above 1.2440 is at 1.2570, 1.2660.
We mentioned yesterday that in order to revive the flagging momentum, EUR has to “stage a clear push above last week’s top near 1.2325 within these 1 to 2 days”. EUR blast past this level in a hurry and surged to hit a high of 1.2415, not far from the revised ‘target’ of 1.2440. The bullish phase that started last Monday is still clearly intact and the next ‘target’ above 1.2440 is at 1.2570 followed by 1.2660. The latter level is a solid resistance from a longer-term perspective. On the downside, support is at 1.2320 but only a break of 1.2290 would indicate that an interim top is in place.
GBP/USD: Bullish (since 15 Jan 18, 1.3735): Above 1.4300 would open up the way to 1.4570.
In the update on Tuesday (23 Jan, spot at 1.3990), we highlighted the break of 1.4000 suggest further GBP strength towards 1.4100 and 1.4180. These two levels were exceeded in a ‘jiffy’ as GBP hit an overnight at of 1.4266. There is a minor resistance at 1.4300 and a break of this level would open up the way for a move to 1.4570. Overall, the bullish phase that started last Monday (15 Jan, spot at 1.3735) is still clearly intact until 1.4030 is taken out. On a shorterterm note, 1.4120 is already a strong support.
AUD/USD: Bullish (since 15 Dec 17, 0.7665): The next ‘target’ above 0.8125 is at 0.8165.
AUD finally managed to break last week’s 0.8038 peak as it hit a high of 0.8083. After deteriorating for several days, upward momentum has perked up considerably with the strong rally yesterday and from here, the revised ‘target’ of 0.8125 appears to be back in sight. Looking further ahead, a break of this rather strong resistance of 0.8125 (high in 2017) could lead to a quick pop higher towards the next ‘target’ at 0.8165. On the downside, now that momentum has picked up, the ‘stop-loss’ is raised higher to 0.7990 from 0.7940.
NZD/USD: Bullish (since 14 Dec 17, 0.7015): 0.7435/40 is a high hurdle to overcome.
We indicated yesterday that a break of 0.7365 would indicate the bullish phase in NZD has scope to extend further towards the Sep 2017 high of 0.7435. NZD took a peek above this level (high of 0.7437) but got slammed down on the back of the weak NZ inflation data. While the bullish phase that started in the mid-Dec is still intact, 0.7435/40 is acting as a very strong resistance now and would be a high hurdle to overcome. That said, a break of this level could open up the way for a move towards the 2017 peak of 0.7557. On the downside, ‘stop-loss’ remains unchanged at 0.7280 for now.
USD/JPY: Shift from neutral to BEARISH: 108.50 first, then 107.30.
In the update yesterday (24 Jan, spot at 110.25), we highlighted the importance of the key 110.00 level (weekly trend-line support) and held the view that a NY closing below this level would indicate that USD has moved into a bearish phase with an immediate ‘target’ of 109.10. The ‘target’ was exceeded in a blink as USD plummeted to a low of 108.95 during NY hours. The outlook for USD is clearly bearish now and from here, we are aiming for 108.50 first but there appears to be scope for further extension towards the next major mid to long-term support at 107.30 (low in 2017 which coincides with another rising weekly trend-line). In order to maintain the current strong downward momentum, any rebound should not move back above the ‘stop-loss’ at 110.30. On a shorter-term note, 109.80 is already a strong level.
Source: United Overseas Bank Global Economics & Markets Research